A LPL policy provides coverage for Professional Services performed on behalf of the Named Insured. Most carriers provide coverage for legal services performed on or after the retroactive date, including work done as a notary, title agent and mediator. Each insurance company has a different definition of Professional Services, so be sure to read your policy for specific coverage details.

Coverage typically extends to attorneys, paralegals, and other employees of the law firm. It may also include former employees for acts performed during their employment with the firm.

Legal malpractice insurance covers claims such as negligence, errors, omissions, misrepresentation, breach of fiduciary duty, and other professional misconduct.

Professional Liability insurance policies are written on a “Claims Made” basis. This means that the policy in effect at the time a claim is made is the policy that responds to the claim, not the policy in effect at the time that the act, error or omission occurred. In other words, a “Claims Made” policy offers coverage for a claim arising from a legal service that not only occurred on or after the retroactive date (as stated in the Declarations Page of the policy), but also was first made against an insured during the policy period.

A "Claims Made" policy covers claims reported during the policy period, regardless of when the alleged act occurred, provided it was after the retroactive date. An "Occurrence" policy covers claims for incidents that occurred during the policy period, regardless of when the claim is made.

The retroactive date is the date from which your legal malpractice insurance policy will cover incidents. Claims arising from acts that occurred before this date are not covered. It is crucial to ensure that the retroactive date aligns with the start of your legal practice to maintain continuous coverage.

The limits of liability depend on the size of your firm, the areas of practice, the number of clients, and the potential exposure to claims. It's important to assess your firm's risk and consult with an insurance professional to determine appropriate coverage limits. To determine how much insurance you should carry, think about the size of cases that you handle, and what your exposure might be. Also, find out if any clients have a requirement for a minimum policy limit amount. Some clients, referral programs, lenders and title companies require certain limits.

Implementing best practices such as thorough documentation, regular training, clear communication with clients, conflict checks, and peer reviews can help reduce the risk of legal malpractice claims.

Anytime an attorney becomes aware of a potential claim, is served with a lawsuit or receives a verbal or written threat of malpractice, the matter should be reported immediately to your insurance agent, who will then report it to the insurance company Claims Department. Bar Complaints should also be reported to the carrier as a potential claim. Prompt reporting ensures that your insurance provider can respond appropriately and provide the necessary support.

Coverage for prior acts depends on your policy's retroactive date and whether continuous coverage has been maintained. If you switch insurance providers, it’s important to confirm that your new policy includes prior acts coverage.

Policies can be canceled or non-renewed under certain circumstances, such as non-payment of premiums or significant changes in risk. However, insurance providers typically provide notice of cancellation or non-renewal, allowing you to address any issues or seek alternative coverage.

Tail coverage, or an extended reporting period endorsement, provides additional time to report claims after a policy has expired or been canceled. This is particularly important if you retire, leave the practice, or switch insurance providers.

It is advisable to review your policy annually or whenever there are significant changes in your practice, such as adding new attorneys, expanding practice areas, or experiencing a significant increase in clients.

You can switch providers, but it’s important to ensure continuous coverage by maintaining the same retroactive date and considering tail coverage from your previous provider. Consulting with an insurance professional can help ensure a smooth transition.

If a claim exceeds your policy limits, your firm will be responsible for the remaining amount. It’s crucial to select adequate limits of liability to protect your firm’s assets and financial stability.

Some policies may provide limited coverage for legal expenses associated with disciplinary proceedings or investigations. It’s important to review your policy details to understand the extent of coverage provided.

How does Legal Malpractice Insurance interact with other types of insurance? Legal malpractice insurance specifically covers professional liability claims. It’s important to also have general liability, cyber liability, and employment practices liability insurance to cover other risks your firm may face.

The cost of insurance is influenced by factors such as the size of your firm, areas of practice, claims history, location, and the coverage limits and deductibles selected.

Some insurers offer discounts for firms that implement risk management practices, participate in continuing education, or have a clean claims history. It’s worth discussing potential discounts with your insurance provider.

Kouwenhoven & Associates Inc. provides expert guidance, tailored insurance solutions, and comprehensive support to help law firms manage their professional liability risks. Our deep understanding of the legal industry ensures that your firm receives the best possible protection.